Top Asian local fund houses in 2021, explained (part 2)
Since its launch a decade ago, the AsianInvestor Asset Management Awards have become an industry leader, sought after by the largest asset managers with a presence in Asia Pacific.
The awards have evolved through the years. While they used to be selected solely by the editorial team, we now tap the knowledge and expertise of a judging panel comprising independent industry veterans and top executives from asset owners across the region to bring greater weight to our awards procedure.
We have also developed more specific criteria with a points system to guide entries and allow for a more structured and transparent process.
Today we reveal the rationale behind the judges' selection of winners for the Top Local Fund Houses for Japan, Malaysia, Philippines, Singapore, Taiwan and Thailand, which we had announced in April. Read part 1 here.
The criteria for this category included business growth in 2021 particularly with institutional clients; sophistication evolution such as new markets, products or mandates; and key innovations in areas such as services and technology. As with all our awards, client testimonials and case studies were given some weight in the decision process as well.
Tomorrow, we reveal the rationale for our asset service award winners. Congratulations again to all winners.
Asset Management One Co., Ltd
Asset Management One (AMO) in 2021 not only renewed its focus on high-value-added
products and sustainability, it expanded across all of its AUMs, returns, and number of clients in its institutional businesses.
Its AUM increased 7.8% from 2020, achieving $511 billion at the end of 2021.
In terms of institutional investment, the AUM expanded 8% achieving $249 billion. Largely due to an expanding pension sector in Japan, its 13.4% increase accounted for 64% of the overall increase in the companywide AUM.
The number of institutional clients also increased by 21, bringing AMO’s institutional clients total to approximately 600.
From a product perspective, AMO acquired mandates for active funds that totalled $2 billion in Japanese equities and global fixed income in public pension funds.
Its Investment Sommelier Fund series, a product offered to retail investors, has continued to maintain stable risk-return even during the Covid-19 pandemic enabling AMO to expand its business from retail to institutional investors by launching private investment trusts and offering them to investors of financial institutions.
Its leading global equity product, the Global Small Mid Equity Quality Growth Fund, has also gained recognition due to its uniqueness. With most in a crowded sector focusing on super-large tech firms, this product is aimed at mitigating individual equity risk in investors' overall portfolio by incorporating small and medium-sized equities.
Add to this a sustained focus on expanding its ESG offering and Japan’s premier fund house was the judges’ pick for this year’s award.
The breadth of the AmInvest offering caught the judges’ attention with this submission, with the fund house proving itself to be a complete investment solutions provider for both conventional and Islamic investments.
With a total AUM of MYR49.1 billion ($11.13 billion), Aminvest products span the risk/return spectrum, asset classes, geographical exposure and strategies that have allowed investors to benefit from any market environment.
Longevity has also been a feature of the Aminvest story, successfully retaining long-standing relationships with institutional clients, in one instance spanning 39 years.
Superlative fixed income capabilities and expertise means it has grown its AUM organically over the decades and in that period it has also built up its capabilities and expertise in managing fixed-income and sukuk investments.
AmInvest manages Malaysia’s first and largest ETF in the country with a fund size around MYR1.7 billion and has displayed outstanding unit trust fund performance, cumulatively outperforming its peers across asset classes over 1-year, 3-year and 5-year periods.
With a diverse expertise for broad institutional mandates, strong investor education and awareness and its AmPRS funds ranked among the top 10 best performing PRS funds in the market, AmInvest continues to impress on the Malaysian fund market.
It has continued to onboard new clients over the years as well as develop new funds, particularly those seeking Sustainable and Responsible Investment (SRI) and ESG readiness.
It is currently the largest ETF provider in the country.
BDO Trust and Investments Group - BDO Unibank, Inc.
BDO Trust is a giant in the Philippines.
It is the largest in the domestic trust and investments industry with a 24% market share and trust assets under management of PHP1.230 trillion ($24.12 billion) at the end 2021. In the sector, no other company comes close, and its closest rival currently lags by 28%.
Normally size and scale could lead to complacency but BDO Trust showed its mettle in a tough operating environment growing by PHP106 billion ($2.08 billion) year-on-year – a growth it put down to an expanding retail market, a stable institutional client base, consistent fund performance, and a strong brand.
That BDO Trust’s AUM growth of 9% could be mainly attributed to fresh funds from both new and existing clients was even more impressive given the Philippines’ challenged macro- economic climate.
Its investment strategy of focusing on portfolio diversification in global equity assets, which performed well in 2021, allowed its institutional clients to diversify into new themes such as technology, healthcare and communications which are largely absent in the local market.
Its BDO ESG Equity Fund, meanwhile, successfully targeted institutional investors who are increasingly screening the institutions they invest in.
As with most emerging markets, investors have never lost on property and BDO Trust has plans to introduce new Real Estate Investment Trusts (REITs) as part of its portfolio offering in 2022, allowing clients to diversify into real estate without the large capital outlay it usually requires.
As you might expect from a name like Fidelity, globally the fund outperformed. But within its stable, Singapore was a star performer.
It grew as it served institutional investors including sovereign wealth funds, financial intermediaries, insurance, online distributors, private bank and wealth managers and advisors.
However, it was its focus on sustainable and ESG funds that caught the judges’ eyes. It was described by judges as: “A very strong submission. A lot of depth in ESG and sustainability investing. Technology upgrade and investor education also stood out.”
Besides six ‘sustainable family’ funds registered in Singapore that explicitly pursue investments with highly-rated ESG elements, there were more than 35 funds in Singapore classified Article 8 under European Sustainable Finance Disclosure Regulation (SFDR) with a minimum of 50% assets invested in sustainable securities.
A growing number of Sustainable Family funds were on-boarded by clients, such as the FF – Sustainable Asia Equity Fund, which was repurposed from a broad Asia Equity strategy to give it a sharper ESG focus.
Its ESG strategies’ performance was resilient throughout the pandemic, for example FF – Sustainable Asia Equity Fund outperformed with fund inflows to US$3.85billion AUM (as at the end of January 2022).
Besides serving and expanding its traditional institutional client business, it is now broadening into a new segment of fintech clients by forging digital partnerships with new financial advisers, feeding its funds into their portfolios.
Its expansion plans include growing new business pillars in digital assets and private assets.
Its products continue to resonate well with institutional investors, and in 2021 several key distributors on-boarded Fidelity funds to their product shelf, once again ensuring that Fidelity holds its place as a competitive and market-relevant solution.
Capital Investment Trust Corporation
CIT’s strategy of having both well-developed active and passive mutual funds bore fruit in 2021, placing the corporation among 9 of 39 fund houses in Taiwan that grew their assets under management over five consecutive years.
At the end of 2021, CIT’s AUM reached NT$424 billion ($14.2 billion), increasing some NT$7.5 billion from the end of 2020 to hit a record high again.
Its ETFs had total assets under management of $NT269.64 billion at the end of 2021 and the total size of CIT’s bond ETF was $NT267.38 billion, ranking it first among its peers.
Thanks to good stewardship, mutual fund performance showed impressive results in 2021.
The average return of Taiwan equity funds issued by CIT was 41.91% in 2021, and the return on its best-performing funds - Capital High-Tech Fund and Capital Strategic Alpha Fund - was 49.8% and 47.17%, respectively.
In terms of overseas equity funds, the return on its Capital India Medium and Small Cap Equity Fund hit 28.5% in 2021, ranking it first among the al- India equity funds issued by its rivals in Taiwan.
ESG considerations have long been part of the CIT story, having signed the “stewardship principles for institutional investors” in 2016 which ensures that investment is carried out in companies with better, or improving, ESG scores.
As with many funds in the region, Covid has accelerated investment in digital services and the company has kept up a good pace in expanding the number of automated financial management systems in its suite of offerings to clients.
Krungsri Asset Management Company
A solid structure, impressive 11% growth and a slew of innovative products swung it for judges when it came to Krungsri Asset Management.
In a challenging environment, the fund’s total AUM grew 11% (for a total of ฿581 billion), at a time when the industry growth rate was just 6.57%.
This was achieved through healthy contributions from its mutual and private fund business which both hit double digit growth rates of 11.5% and 12% respectively.
In terms of institutional client coverage, its Foreign Investment Funds (FIF) offered clients geographical coverage as well as diversification that coupled risk reduction with the opportunity for better returns.
Among its latest funds, it also launched Krungsri Finnoventure PE Y2033, Thailand’s first fund providing Institutional Investors or ultra-high-net-worth investors access to Asean's leading start-up investment through the Finnoventure Private Equity Trust.
In 2021, it further served its institutional client base with the launch of a series of 17 institutional share class funds selected from among outstanding existing funds – a kind of best of the best.
Add to this a wide range of investment services – including e-KYC processes, chatbot programmes and a One App system that allows clients to complete mutual fund and provident fund transactions at the same time – and Krungsri stood out from the pack.